Time for USD to regain some confidence

The USD will find support against the EUR in the weeks ahead, as President Draghi is expected to maintain an accommodative stance during his introductory statement next September 3, likely insisting that the Governing Council still has tools available should monetary and financial conditions tighten further.

"Moreover, while the US is not immune to international volatility and Fed rate hike call is expected to be in March 2016, the US economy remains the global growth outperformer and its central bank is the one nearest to policy normalization, as the US is one of the few countries able to generate inflation", says Barclays. 

In this regard, next week's ISM service and employment report should confirm the firm footing of the US economy andare expected to likely help markets regain some confidence. Manufacturing and service ISM (Tuesday and Thursday) should support confidence in the recovery of the US economy. 

"A reading of 52.0 is anticipated for manufacturing and 57.5 for service. Headline NFPs are expected to increase to 225k, with the unemployment rate falling to 5.2% and wages growing 2.0% y/y. Positive readings from the employment report should reaffirm the strength of the US labor market", added Barclays.